What is IFTA Tax?
IFTA: International Fuel Tax Agreement
The International Fuel Tax Agreement (IFTA) is an agreement between the lower 48 states of the United States and the Canadian provinces, to simplify the reporting of fuel use by motor carriers that operate in more than one jurisdiction.
IFTA fuel tax reports are due on the last day of the month following the close of the calendar quarter for which the report is due.
An operating carrier with IFTA receives an IFTA license and one decal for each qualifying vehicle it operates. The carrier files a quarterly fuel tax report. This report is used to determine the net tax or refund due and to redistribute taxes from collecting states to states that it is due.
The IFTA license offers several benefits to the interstate/inter-jurisdictional motor carrier. These benefits include one license, one set of decals, one quarterly fuel tax report that reflects the net tax or refund due. These advantages result in cost and time savings for the carrier and the member jurisdictions.
What is required to complete an IFTA return?
The following information is required on the IFTA quarterly tax return:
- Total miles, taxable and nontaxable, traveled by the licensee's qualified motor vehicles in all jurisdictions, IFTA and non-IFTA, including trip permit miles
- Total gallons of fuel consumed, taxable and nontaxable, by the licensee's qualified motor vehicles in all jurisdictions, IFTA and non-IFTA
- Total miles and taxable miles traveled in each member jurisdiction
- Taxable gallons consumed in each member jurisdiction
- Tax-paid gallons purchased in each member jurisdiction and
- Current tax rates for each member jurisdiction.
Who Must File?
An interstate motor carrier operating "qualified motor vehicles" between at least 2 member jurisdictions (The 48 contiguous states of the US and 10 Canadian provinces) must have an International Fuel Tax Agreement (IFTA) license and decals issued by their base jurisdiction.
If you have the IFTA license, you must file the Quarterly IFTA Return to your base jurisdiction.
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